When changes in farm ownership or operation take place, a farm reconstitution is necessary.
A reconstitution, or recon, is the process of combining or dividing farms or tracts of land based on the farming operation.
To be effective for the current fiscal year, farm combinations and divisions must be requested by Aug. 1 for farms subject to the Agriculture Risk Coverage and Price Loss Coverage programs.
A reconstitution is considered to be requested when all of the required signatures and other applicable documentation, such as proof of ownership, are submitted.
Total Conservation Reserve Program and non-ARC/PLC farms may be reconstituted at any time.
The following are the different methods used when doing a farm recon:
1. Estate method. This is the division of bases, allotments and quotas for a parent farm among heirs in settling an estate.
2. Designation of landowner method. The may be used when 1) part of a farm is sold or ownership is transferred; 2) an entire farm is sold to two or more people; 3) farm ownership is transferred to two or more people; 4) part of a tract is sold or ownership is transferred; 5) a tract is sold to two or more people; or 6) tract ownership is transferred to two or more people.
To use this method, the land sold must have been owned for at least three years, or a waiver granted, and the buyer and seller must sign a memorandum of understanding.
3. DCP cropland method. The direct or countercyclical payment (DCP) method is the division of bases in the same proportion that the DCP cropland for each resulting tract relates to the DCP cropland on the parent tract.
4. Default method. This allows the division of bases for a parent farm with each tract maintaining the bases attributed to the tract level when the reconstitution is initiated in the system.
For more information, contact your local USDA Farm Service Agency office.